Sunday, September 3, 2017

Another financial wizard weighs in on SPLC's foreign investments

Financial literacy eludes Morgan Mayhew, who is presumably a religious conservative writing for an outlet called Liberty News Now. Mayhew writes: “Corrupt Liberal Hate Group Caught Moving Millions To Secret Offshore Bank Accounts.” Uh, … no.
The Southern Poverty Law Center (SPLC) has been caught pushes <sic> millions offshores <sic> as they continue to pander to the Alt-Left by labeling Christian ministries, and any <sic> other conservative organizations as “hate groups.”
Suggesting that Southern Poverty Law Center is corrupt because one does not approve of their policies is preposterous. More importantly, as an issue of fact, this has nothing to do with offshore bank accounts (secret or otherwise). Nor, for that matter, was SPLC “caught” doing anything as their financial records are thoroughly transparent as a 501(c)3 nonprofit entity.

One more time: SPLC has a large endowment. Those funds are in a professionally managed investment portfolio. Some of those investments are partnerships based in the Cayman Islands. SPLC is not a general or the managing partner of any of these partnerships and in every case its interest in the partnership is less than 10%. These ventures are based in the Cayman Islands because the country provides a tax pass-through. The domestic alternative is Delaware. Without writing a lengthy treatise, establishing a limited partnership in the Cayman Islands offers more flexibility for the general partner than Delaware.

SPLC is responsible for paying U.S. taxes on any profits because they are not derived in the course of the charity's ordinary endeavors. In the most recent tax year, it took a loss of $3 thousand. SPLC is not, in any way, frustrating U.S. tax law or doing anything inappropriate. Nor, for that matter, is SPLC facilitating tax avoidance by anyone else.

Is Cayman Islands a tax haven? Absolutely but not in this form.

Just for comparison, one of the largest charities in the United States is Thrivent Financial for Lutherans, a Christian operation. Investments outside of the United States (in millions):
  • Central America and Caribbean: $314
  • North America (outside of US): $1,147
  • Europe: $2,792
I do not have the 990-T but you can be certain that a chunk of that Caribbean money is in Cayman Islands. There are more foreign investments in Africa, Asia and the Middle East but you get the idea.

What would a piece like this be without a hate group leader to complain?

Brad Dacus, the president of the Pacific Justice Institute, a Sacramento-based group that specializes in the legal defense of religious freedom and parental rights was also just recently listed on SPLC’s famous “hate groups” list.

When asked to respond to the SLPC’s libelous classification, Dacus responded, saying, “why is the Southern Poverty Law Center doing this? It’s simple. They want to vilify and isolate anyone that doesn’t agree with their very extremist leftist policy and ideology.” If the SPLC was – in some distant and forgotten time – ever about protecting people and defending civil rights, they have completely abandoned that mission.  “This isn’t about defending civil rights; this is about attacking civil rights.”
Libel consists of a written defamatory statement. Mayhew fails to identify SPLC's factually incorrect assertions. The hate group designation is an opinion. For his part, Dacus is repeating the talking point about having to “agree” with SPLC. SPLC designates organizations as hate groups because of their efforts to marginalize a minority group — usually by portraying them inaccurately. The idea that a hate group listing denies listees of their civil rights is utterly absurd. Dacus has been practicing law for over 25 years and should know better.

By the way, looking at the tax return of PJI they claim a payroll of over $600 thousand. Yet they did not submit any W-3 reports (wage and tax statements). Nor did they report any 1099 independent contractors. Is that an error or are they hiding something?

Mayhew then goes for the bat guano gold:
Recently, in an investigation conducted by the Washington Free Beacon, it was discovered that the SPLC gave titanic sums of money to numerous anonymous offshore accounts – from places like the Cayman Islands, Bermuda, and the British Virgin Islands.
“Accounts?” SPLC has offshore limited partnership interests for investment purposes. “Anonymous?” Not in any way whatsoever. Every one of these is fully disclosed. Where do these people get these crazy notions? It gets even nuttier:
Is the SPLC being used as a money laundering conduit to finance the radical projects of wealthy liberals, and Soros connected groups?
Exactly how we get from limited partnerships to money laundering is anyone's guess. Nonprofit organizations like George Soros' Open Society Foundations do not need to launder money. The largest of these is the Open Society Institute which has assets of over $2.6 billion.

I will stop here. It has been fun but this guy is obviously an imbecile.

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